Luxoft Holding (LXFT): Growth and Pricing Power Ahead - Berenberg
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Berenberg analyst, Georgios Kertsos reiterated his Hold rating on shares of Luxoft Holding (NYSE: LXFT) after Q1 2017 results were in line with the market’s expectations, with strong growth across key verticals and a -c6% yoy decline in revenue concentration from its largest client account. Management expects to sustain its pricing power due to its strong market positioning.
Top-line growth was supported by the automotive vertical, which is the group’s growth engine (+78% yoy growth) and now represents c14% of sales. The financial services (FS) vertical posted strong yoy growth (+18%) despite the slowdown in its main account (Deutsche Bank), as this was offset by further penetration in smaller clients. The EBITDA margin contracted by c180bp yoy, mainly due to higher sales and marketing (S&M) charges and increased R&D.
Shares of Luxoft Holding closed at $53.76 yesterday.
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